Navigant Research Blog

Sandia National Laboratories is developing a microgrid architecture that holds the potential to revolutionize not only the microgrid industry, but all electricity generation. The secure scalable microgrid (SSM) will allow for 100% stochastic, or unpredictable, generation (e.g., solar PV and wind). Many companies and individuals have feared that renewable generation assets will compromise the stability of the electricity grid, and, under more traditional grid architectures, this makes sense intuitively. Since neither solar nor wind are load-following or dispatchable, they can wreak havoc in the absence of sufficient traditional generation or energy storage to compensate for the large swings in renewable production.

The SSM architecture includes a communication network that connects the loads to the generation assets, along with weather and load prediction, energy storage assessments, and a device to monitor the connection to the central utility. It uses Hamiltonian functions to balance and optimize generation and load given uncertainties in the data it collects. With an open architecture design, the SSM also promotes transparency of operation, configurability, extensibility to different systems, and its “plug-and-play” capability.

SSM is currently being tested at the SSM Test Bed in New Mexico, which includes programmable loads that mimic both fossil and renewable based generation, buses, and integrated control computers to effectively simulate the microgrid in Lanai, Hawaii. While there is no timeline yet for the commercialization of the technology, its eventual introduction into the market will allow for significantly greater penetration of renewables than are currently feasible.

Enabling the Green Grid

The major implication for SSM is that electricity generation can become completely renewable and independent of fossil fuels, a necessary step in the greening of the power grid. Environmental concerns aside, completely stochastic electricity production usually requires no fuel inputs. As the production costs associated with solar PV and wind turbines continue to decrease, and stochastic generation becomes economically competitive with traditional fossil fuel generation, the SSM should allow a transition to mostly, or completely, renewable electricity generation.

New Zealand and Austria, for example, have goals of 90% and 78% renewable generation, respectively, in the coming decades. While it’s relatively simple, if costly, to install sufficient qualifying generation, the task of ensuring grid stability is much more daunting. Germany has recently experienced grid issues due to its high penetration of solar, since power outputs can change very rapidly. The SSM grid architecture, if it can be scaled up for central grid use, would help to ensure that even significant fluctuations in power output from renewable sources can maintain consistent voltage and frequency across the grid.

In the near future, the SSM architecture will bolster the ability of utilities to meet renewable energy requirements by incorporating utility distribution microgrids (UDMs) into their portfolios and service areas. As described in the Navigant Research report Utility Distribution Microgrids, UDMs are forecast to increase 1,100 MW by 2018, and this trend will only be reinforced by the advent of the SSM.

Total UDM Capacity by Region, Average Scenario, World Markets: 2012-2018

In late October of last year, as Tropical Cyclone Sandy tore through the northeastern United States, more than 8.5 million people lost power at some point during the storm. Microgrids kept the lights on in parts of New York, New Jersey, and other locations in New England.

The Connecticut Microgrid Grant and Loan Pilot Program was first proposed in July 2012 and administered by the Department of Energy and Environmental Protection (DEEP) Bureau of Energy and Technology. While the program was initially suggested as a response to Tropical Storm Irene, the project gained momentum after Sandy, and will culminate with state funding for a number of microgrids. Connecticut Governor Dannel Malloy’s recent budget proposal increased funding for the program by $30 million, in addition to the $15 million already slated.

The first selection round was completed in late February, and of the initial 36 proposals, 27 have been vetted as technically feasible; 8 of those 27 were approved pending the correction of design issues. These projects include police stations, hospitals, and other critical loads that need to be protected from power failures during emergencies. Wanting to learn as much as possible about the potential risks and benefits of various microgrid configurations, DEEP encouraged novel technologies and imposed no size constraints on the microgrid projects.

Fossil Fuel Limits

In an interview, Veronica Szczerkowski of DEEP said that the program includes a number of requirements and nuances that set a higher standard for compatibility with utility operations from previous deployments of privately owned microgrids. First, state funding is limited to the design, engineering, and utility interconnection costs of each project, and will not fund customer-owned generation or energy storage assets, the latter of which come with the largest price tags among microgrid enabling technologies. Since there may be split ownership of grid infrastructure with this new fleet of microgrids, state funds will flow to microgrid asset owners and developers as well as to utilities. Second, utilities will be required to own and maintain all non-private distribution grid assets interconnecting with customer-owned microgrids.

Perhaps the most novel aspect to the DEEP microgrid program is that all microgrids supported by state funding must have sufficient fuel onsite to run the microgrid for 2 weeks and have access to fuel for a total of 4 weeks. This prerequisite constrains microgrids based on fossil fuels. One of the projects that moved into the second round is a hospital with 5 MW of diesel generators. A rough calculation means that the hospital would have to have more than 85,000 gallons of diesel onsite to run at an average of 3/4 load for the required 2 weeks. While from an energy surety standpoint, such a condition makes sense, especially for critical loads, even if such storage requirements are unwieldy.

Given these fuel requirements, the DEEP microgrid program encourages various clean technologies. In addition to solar and wind energy sources, fuel cell deployment is also emphasized since Connecticut is home to a number of fuel cell manufacturers, including FuelCell Energy, Proton Power, and the recently acquired company UTC Power (which will be sold under the ClearEdge name). In fact, 10 of the 27 projects include fuel cells in their proposals, accounting for about 28% of the total capacity.

Even though there are a number of unknowns in the Connecticut program, one thing is clear: the project will be a testing ground for how to implement microgrids on a wide scale, and the outcomes will undoubtedly inform future publicly funded programs.

V3Solar has made waves in the cleantech press over the last few weeks with its Spin Cell prototype. With claims of levelized cost of energy (LCOE) around $0.08 per watt (as reported by CleanTechnica), this system would shatter current records for solar power cost effectiveness, prompting the question: does the Spin Cell actually work as well as advertised?

First, a brief primer on the technology. The Spin Cell bucks the traditional flat solar panel design: it’s a conical device that spins. The cone shape, which resembles an Apollo-era space capsule, allows for greater exposure to the sun, without active tracking. The self-contained unit, based on traditional concentrated photovoltaic (CPV) cells, also has magnifying lenses on its exterior surface that increase the light to each of the individual solar panels. However, in conventional solar arrays, increased solar radiation raises the temperature of the cells themselves, decreasing efficiency or, ultimately, destroying the unit. V3Solar claims that the spinning unit’s motion keeps the surface of the PV cells cool (only slightly above ambient temperature), thus maintaining efficiency.

V3Solar hired Bill Rever, a solar industry veteran, to perform a technical review of the device. While Rever thoroughly explains the concepts of the technology, as well as the economic implications, the term “technical review” is a bit of misnomer. Essentially, Rever restates the tests that were run by Nectar Design on the prototype, without offering any new information. The results of the tests indicate that the temperature on the Spin Cell remains lower than the flat panel control, but they don’t detail its power production. Most importantly, the CPV yields have not been empirically proven in this design.

Hyping the Spin

Still, the hype that the Spin Cell has created is justified. The technology is interesting, but the business case for the Spin Cell is the real draw. An $0.08 per watt LCOE would make it one of the cheapest forms of electricity, even compared to coal and natural gas. Like most things in the energy industry, if the economics work out, the technology will prevail. Programs like feed-in tariffs (FITs) and renewable portfolio standards (RPSs) help support nascent green technologies, but the ideal goal is for those technologies to thrive without government intervention. If the Spin Cell works as V3Solar says it does, V3Solar will have accomplished what no other photovoltaic company has: creating a carbon-free, economically competitive means of energy production.

If proven, the technology would not only permit inexpensive and clean generation, but would also free up significant governmental funds dedicated to making solar more economically attractive. For example, the solar Residential Renewable Energy and Business Energy Investment tax credits, in the United States, would be rendered obsolete, increasing available government funds for more advanced energy technologies such as bioenergy and marine hydrokinetic technology. Similarly, Germany’s FIT would be able to ramp down quicker than planned, while Japan’s new FIT would become unnecessary.

The Spin Cell eventually will have to prove itself in the only testing environment that matters: the open market.

Kickstarter has become a popular means for ambitious, underfunded entrepreneurs to test their ideas in the open market. Kickstarter raised more than $319 million for 18,109 projects in 2012 alone. This success raises the question: what else can be done with this business model?

Banking on forthcoming legislation from the Jumpstart Our Business Startups Act (JOBS Act), Oakland-based Mosaic thinks it has the answer: renewable energy. Launching its publicly facing platform last week, the company funded four projects submitted by third-party companies, at a value of more than $313,000, in less than 24 hours. Mosaic’s minimum investment is $25. The promised payback terms range between 60 and 109 months. Mosaic says the loans come with interest on investments in the 4% to 6% range, which is better than nearly any current bank rate.

This most recent development has brought funding for all of Mosaic’s solar projects to approximately $1.1 million. Mosiac previously funded five beta projects, which carried no yield but proved the feasibility of the technology.

Investing in such projects does not promise any return and carries inherent risk since venture funding for companies using Mosaic is not insured by the FDIC, unlike bank accounts. Mosaic says it select projects with minimal risk and currently has a 100% on-time payback rate. If the experience of other crowdfunding companies like Kiva is an indication, Mosaic should have a lower default risk than the majority of mortgages.

Prior to the JOBS Act of 2012, investments in projects of this size were hard to come by, and regulations by the Securities Exchange Commission (SEC) still have not been finalized. In general, though, these regulations will likely allow smaller investors to participate in such projects by altering or dropping the accreditation requirement. Because of other SEC rules, Mosaic can currently operate in California and New York, but the JOBS Act may create a set of national rules and simplify crowdsource funding.

Mosaic is neither the first nor the only company using crowdsource funding for green and renewable energy projects. SunFunder operates crowdsourced loans with an emphasis in solar installations in the developing world. Firms like Greenfunder and Green Unite have broader goals than Mosaic but still operate under the green/crowdsource banner. Even social-impact funding giant Ashoka has launched a beta version of a crowdsource funding platform, called Innovations for the Public, with a $10 minimum investment. While Innovations for the Public does not focus entirely on renewable energy projects, it shares a business model with Kickstarter and Mosiac.

It’s too early to say whether the crowdsourcing model is the future for small renewable energy projects, but if Mosaic continues to be successful, expect to see other companies competing for the space. More importantly, expect to see a boom in small solar and other clean energy projects.